Tag: maldives news

Maldives airport operator praises “smooth” handover as government remains undecided on INIA future

The Maldives Airports Company Limited (MACL) has said there has been no disruption to services at Ibrahim Nasir International Airport (INIA) after it resumed management of the site from infrastructure group GMR on Saturday (December 8 )  – a claim backed by several resort operators and airlines.

Indian-based GMR yesterday handed INIA over to the state-owned Maldives Airports Company Limited (MACL) after the Maldivian government had voided its concession agreement, giving the company seven days to leave the country.

The sudden eviction of the developer – which won a 25 year concession under the former government to manage and upgrade the airport – scraps the project, which at US$511 million was the single largest foreign investment in the Maldives.

Upon reclaiming management of the airport yesterday, MACL Managing Director Mohamed Ibrahim told Minivan News that the handover had gone “smoothly”, with INIA continuing to operate over the last 24 hours as it had done under GMR.

“We have the same staff and equipment here as before [the handover]. Two years back we handed over the same equipment to GMR and there has been no discontinuation of service,” he said.

As part the GMR’s concession agreement, aside from developing an entirely new airport terminal building, the company had also undertaken work to renovate and update INIA’s existing terminal structures and operations – including retail and baggage handling facilities.

With MACL once again managing the site, a senior services manager for one of the largest airlines presently flying to the Maldives told Minivan News that it had experienced “no issues at all” in terms of operating in and out of the country since the handover.

Similarly, the general manager of a resort in Male Atoll also stressed that there had been no disruptions to service.

“Certainly so far there has been no impacts on our arrivals or departures, things seem to have gone smoothly,” the general manager said.

Future direction

When contacted about the future for the airport post-GMR, the President’s Office today told Minivan News that no decision had yet been taken on when – or if – the country would look to tender a new privatisation agreement for the site.

“Nothing of that kind has been decided,” said President’s Office Media Secretary Masood Imad.

Asked as to what action would be taken over the existing structures put in place by GMR before work on its proposed new terminal was halted over a permit dispute earlier this year, Masood questioned why the President’s Office had been contacted over the technical “nitty gritty” of the airport.

“We don’t micromanage all aspects of the airport, these are questions for the Transport Ministry,” he said.

Development conference calls

Meanwhile, the religious Adhaalath Party, which forms part of the government coalition of President Dr Mohamed Waheed Hassan, today called for a national level conference to be held on how INIA should be developed and operated in future.

Speaking at a press conference, party President Sheikh Imran Abdullah told local media that the airport development should not be delayed, calling for a conference to be held to air opinions on how best to proceed in future – not ruling out foreign expertise if needed.

“All people involved in this sector should come together soon for a national conference, the result of which should be a vision of how the airport should be operated in the future,” he was quoted by Sun Online.

Sheikh Imran was not responding to calls from Minivan News at time of press.

In recent months, the Adhaalath Party has been among several key government-aligned parties working to oppose the GMR agreement.

Sheikh Imran has previously predicted there would be “some unrest and damage” should the GMR deal be annulled, but nonetheless urged people to come out and support the calls for nationalisation.  The GMR deal was a 25 year concession agreement, with the airport still belonging to the government.

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Singapore verdict justifies government to nationalise anything: former President Nasheed

Former President Mohamed Nasheed has claimed that the recent verdict by the Supreme Court of Singapore allowing the government to annul a development contract with infrastructure group GMR “justifies” the Maldivian government to “nationalise anything”.

Nasheed’s comments follow the handing over of Ibrahim Nasir International Airport (INIA) from GMR to the state-owned Maldives Airports Company Limited (MACL), after the Maldivian government voided the concession agreement.

Nasheed told Minivan News that the annulment was “very unfortunate” and highlighted that the government had “not only expelled the biggest foreign investment in the Maldives’ history”, but also created a “precedent” whereby nationalisation is acceptable.

“[The government] has created an avenue, or rather the verdict they got from Singapore Court, apparently justifies the government nationalising anything,” Nasheed added.

Prior to the eviction of GMR, arbitration proceedings were underway in Singapore over the contested airport development charge (ADC). GMR received a stay order on its eviction and appeared confident of its legal position even as the government declared that it would disregard the ruling and proceed with the eviction as planned.

On December 6, the Maldivian government successfully appealed the injunction in the Supreme Court of Singapore.  Chief Justice Sundaresh Menon declared that “the Maldives government has the power to do what it wants, including expropriating the airport.”

Minivan News has learned that senior Chinese military officials landed at the airport in the tense week leading up to the handover, even as India warned of “adverse consequences” should the government proceed with forceful eviction.  The government has continued to dismiss such claims.

When asked about claims regarding China’s potential involvement, Nasheed said: “I am not aware of any involvement from the Chinese, but what is being suggested is that the coup government seems to have strength, or seemsto get strength, from somewhere, from someone else.”

“In a sense, it is also sad that India has felt that appeasing bigots and appeasing racists and appeasing ultra nationalism is going to help them or this country,” Nasheed added.

President’s Office Spokesman Masood Imad responded to Nasheed’s comments, stating: “Nasheed is absolutely right, we have had some strength from another source. We have had British and Singaporean lawyers who found the contract to be ‘void ab initio’.”

With GMR having now been evicted from INIA, Masood stated that the Indian infrastructure giant and MACL were working “seamlessly together” over the airport hand over.

The verdict from the Singaporean Supreme Court effectively legalising the sovereign eviction of foreign investors regardless of contractual termination clauses or pending arbitration proceedings, was “completely unexpected”, according to one GMR insider – “the lawyers are still in shock”.

A last ditch request for a review of the decision was rejected, as was a second attempt at an injunction filed by Axis Bank, GMR’s lender to the value of US$350 million.

Following a meeting with its staff before the handover, GMR issued the following statement:

“In deference to the orders of the Court of Appeals, Singapore; GMR Male International Airport Ltd (GMIAL) will facilitate a smooth takeover of the Ibrahim Nasir International Airport (INIA) by the Maldives Airport Company Ltd (MACL), effective midnight tonight.

GMIAL has been assured that as a result of this takeover all its employees, suppliers and other interested parties will not be put to any inconvenience. GMIAL remains committed to finding a suitable solution to this situation. We are taking requisite steps to work out the compensation receivable from the Government of Maldives, keeping in mind the judgement of the aforementioned court and the concession agreement dated 28th June 2010.

All actions as above are without prejudice to our legal rights and statements made before various courts/tribunals where matters are currently being pursued or likely to be taken up.”

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Proposed budget faces cross-party criticism

The state budget for 2013 submitted to parliament by Finance Minister Abdulla Jihad has come under heavy criticism from both opposition and government-aligned parties during last week’s 16-hour budget debate.

Speaking during Thursday’s sitting, Majority Leader MP Ibrahim Mohamed Solih ‘Ibu’, parliamentary group leader of the formerly ruling Maldivian Democratic Party (MDP), contended that the proposed budget could not be salvaged or improved through amendments.

Ibu suggested that parliament should “set this aside” and approve enough funds for the state to function in the first three months of 2013.

“After that, appeal [to the government] to propose a budget that is beneficial to the whole nation and represents all constituencies. I don’t believe we can implement this budget any other way,” the majority leader said.

Ibu argued that the estimated revenue of MVR 12.9 billion (US$836 million) was unlikely to materialise.

“This [projected income] includes MVR 1.8 billion (US$116 million) in new revenue. [But] this will not be received,” Ibu asserted.

The MDP MP for Lhaviyani Hinnavaru explained that parliamentary approval would be required for the new revenue raising measures, such as reversing reduced or eliminated import duties, hiking T-GST to 15 percent, raising the airport service charge from US$18 to US$30 and introducing GST for telecom services.

Ibu claimed that the import duty revision to raise tariffs on oil “will not be passed in this Majlis,” calling on the budget review committee to scrap the estimated revenue forecast from import duties.

The MDP would not support increasing T-GST without consultation with the tourism industry, he added.

Predicting that the revenue in 2013 would reach “only MVR 11 billion at most,” Ibu warned that income would not be enough to meet recurrent expenditures on salaries and administrative costs.

Moreover, the fiscal deficit would be considerably higher than the forecast of six percent of GDP, he contended.

“The Finance Minister said the budget deficit in 2013 would be MVR 2.3 billion, that is MVR 2 billion less than the current year. This, too, is a serious deception,” he said, adding that the figure would be closer to MVR 5.9 billion (US$382.6 million) or higher than 10 percent of GDP.

Ibu also noted that while US$50 million was to be taken as foreign loans at an interest rate of 10 percent for budget support, the Finance Ministry did not include any information of the supposed lender.

“The [budget] document says we don’t yet know where the money is going to come from,” he said.

With a public debt-to-GDP ratio of 85 percent at the end of 2013, Ibu said international financial institutions would declare the Maldives “bankrupt.”

The majority leader also criticised Finance Minister Jihad for failing to mention budgeted salary increases for military and police officers as well as plans to hire 800 new officers for the security services.

Combined with the transfer of about 5,400 employees in the health sector to the civil service, Ibu explained that the wage bill would shoot up by 37 percent.

Ibu further questioned whether funds would be available to implement the proposed public sector investment programme (PSIP) of MVR 3.1 billion (US$201 million).

“I am saying that not even 25 percent of this MVR 3 billion PSIP can be implemented next year,” he said, adding that details of lenders for the proposed loans were not provided.

Ibu also protested that the only project for Hinnavaru in 2013, the sixth largest population in the country, was a youth centre worth MVR750,000 (US$48,638).

Echoing the concerns of the parliamentary group leader, MDP MP Eva Abdulla revealed that MVR 6 million (US$ 389105) was added to the budget of the Maldives National Defence Force (MNDF) following the controversial transfer of presidential power on February 7.

Since the MDP government was ousted in the wake of a police mutiny on February 7, Eva said that the police and army have hired 250 and 350 new staff respectively.

Consequently, the institutions spent more than MVR 75 million (US$4.8 million) in addition to the approved budgets for 2012, she claimed.

The proposed budget of MVR 930.9 million (US$60.3 million) for defence expenditure in 2013 was meanwhile 14 percent higher than 2012.

Eva observed that the increase in the government’s wage bill of 37 percent was approximately MVR1.7 billion (US$110 million), which was also the amount allocated for harbour construction in the 2013 budget.

These funds should instead be spent for “harbours, education, sewerage and housing,” she argued.

“I know that the coming year is an election year. But what we know from the experience of [the presidential election in] 2008 is that the election cannot be won by adding employees to the government,” she said.

Coalition partners

Meanwhile, minority leader MP Abdulla Yameen, parliamentary group leader of the Progressive Party of Maldives (PPM), said that the government’s objectives or policies could not be discerned from the proposed budget.

“These projects are very random or ad hoc. The government’s planning should be better than this,” he said.

While continuing deficit spending and accumulating high levels of public debt was a serious concern, “a good thing about this budget is that it hasn’t considered taking funds from the MMA’s [Maldives Monetary Authority’s] ways and means account, or in common language printing money, to finance this MVR 4 billion (US$259 million) [deficit].”

Financing the deficit with loans from the central bank leads to depreciation of the rufiyaa and rising inflation, Yameen said.

Securing commercial or concessional loans to plug the deficit was however “fine in itself if it can be repaid,” he added.

While President Dr Mohamed Waheed Hassan Manik has noted the high salaries paid by institutions such as the People’s Majlis as “a serious problem,” Yameen said he could not see “any kind of sign” of reducing recurrent expenditure or salaries and allowances for government employees.

In his budget speech last month, Finance Minister Jihad noted that almost half of recurrent expenditure was paying salaries and allowances.

On the proposed revenue raising measures, Yameen said PPM could not support introducing GST for telecom services.

“I believe there should be ways to raise income for the government without taking this tax. Therefore, we, our party, cannot support trying to get MVR 200 million (US$12 million) in additional income through imposing GST on telecommunications,” he said.

Concurring with the MDP parliamentary group leader, Yameen called on the government to consult the Maldives Association of Tourism Industry (MATI) to determine whether the sector would be adversely affected by the proposed T-GST hike from 8 to 15 percent.

Government-aligned Jumhooree Party (JP) Leader MP Gasim Ibrahim, business magnate and chair of the budget review committee, said that parliament should consider the economic and social impact “at the micro-level” of the proposed revenue raising measures.

Gasim urged MPs on the budget committee to assess the costs and benefits of the proposed measures, noting that increasing import duties would lead to higher prices.

The MP for Alif Dhaal Maamigili appealed against proposing “unrealistic and empty documents” with the budget and pledging infrastructure projects that could not be delivered.

“The budget we passed for this year was in reality higher than MVR 16 billion (US$1 billion). But coming to year’s end we know from the revised budget that we achieved about MVR 12 billion or MVR 13 billion. So we are actually showing a dream to the public. We are intoxicating them with hopeful fantasies,” he said.

MP Visam Ali of the government-aligned Dhivehi Rayyithunge Party (DRP) meanwhile said it was regrettable that a sizeable portion of the population did not have access to “basic services” such as sewerage, water and electricity while the GDP per capita was forecast to exceed US$5,500 in 2013.

With public debt projected to reach 82 percent of GDP next year, Visam said immediate steps were needed to avoid “bankruptcy”.

She added that it was questionable whether the proposed revenue raising measures could be approved next year as the government had yet to submit any of the amendments or bills required for its implementation.

Visam also expressed concern with administrative costs for government offices increasing by more than MVR 500 million (US$32.4 million) in 2013 compared to this year, noting that it diverts funds away from the public sector investment programme.

In a recurrent complaint of most MPs who spoke during the budget debate, Visam said the two islands in her constituency were neglected in terms of development projects in 2013.

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DRP will not back “personal and emotional” no-confidence vote against defence chief: MP Mausoom

The Deputy Parliamentary Group Leader of the government-aligned Dhivehi Rayyithunge Party (DRP) MP Abdulla Mausoom has stated that there is no ‘spirit’ within his party to support the no-confidence motion against Defence Minister Mohamed Nazim.

Mausoom said although the DRP would support no-confidence motions against cabinet ministers where it thought such actions were justified, he believed the party would not back the Maldivian Democratic Party (MDP) in trying to remove Nazim as defence chief as part of a “personal vendetta”.

In opposing the motion filed by the MDP, the MP said that while not speaking officially on behalf of the DRP whip line, he was nonetheless expressing the views of party members and MPs.

MDP Spokesperson MP Hamid Abdul Ghafoor stated that the MDP did not wish to make a comment on Mausoom’s remarks but said that it was rather “surprising” for a person in such a high position to “speculate on a party’s whip line”.

“We would really like to see DRP follow a strict recipe rather than a random salad in their whip line. They ought to be clear of what their stand is,” Hamid added.

However, Mausoom dismissed Hamid’s statement, claiming that the MDP’s no -confidence motion against Defence Minister Nazim had been forwarded for “personal and emotional” reasons. The Kelaa constituency MP added that the DRP would not assist anyone in settling personal scores.

“The DRP believe that we have had enough of President Gayoom and President Nasheed. We are not in the mood to support anything that is not in the interest of this nation,” he told Minivan News.

Mausoom contended that MDP would not be able to pass such “personal-vendetta based motions” and repeated his claim that the motion lacked sufficient grounds to support its cause.

“DRP would not be reluctant to support a no-confidence motion of a cabinet minister if there are sufficient grounds to pass a no-confidence motion. We would vote anyone out if we had to, but not on personal grounds,” he said.

Asked if his comments were influenced by some DRP MPs and councillors quitting the party over its recent stand in supporting a decision to take an impeachment vote against President Dr Mohamed Waheed Hassan via secret ballot, Mausoom denied the suggestion.

DRP MPs Mohamed Hussain and Ali Saleem announced in the media that they have quit DRP over the party’s stand on the vote to make impeachment vote a secret ballot. The parliament passed the motion by a 41 to 34 majority after several DRP MPs chose to vote with the opposition in favour of the motion.

“Recent events that took place did not affect DRP. We have not got any reports that DRP councillors are quitting the party. It is just PPM councillors who had been working in the name of DRP that are leaving the party following the recent Supreme Court ruling,” he explained.

The Supreme Court recently struck down a clause in Decentralisation Act that barred councillors who had been elected under a party ticket from defecting to another party while in office.

“We believe that the current constitutional system greatly distinguishes the threshold of power between the executive and the parliament. We will not support motions to remove cabinet ministers for personal vendettas, because we believe that it is a duty of all political parties to safeguard the democratic values in the constitution,” he added.

Speaking yesterday to local media, Mausoom stressed that his party would aim to leave behind the country’s political past.

“The parliament has done a lot of things with regard to the emotional sentiments of 30 years [of former President Maumoon Abdul Gayyoom] and three years [of former President Mohamed Nasheed]. Several bills, resolutions and cases have been filed. Lots of time has been wasted. DRP will not support any such thing submitted to parliament, be it PPM or MDP,” he said

Mausoom also warned the MDP of an impending “humiliation” should the main opposition party continue its pursuit of the defence minister’s dismissal.

“If the MDP parliamentarians do not want be humiliated in the parliament floor, if they do not wish to upset their grass root members, I call upon the party to withdraw the no-confidence motion filed against Defence Minister Nazim,” he said.

Mausoom, who previously served in the position of Tourism Minister during the Gayoom era, added that the no-confidence motion lacked a rationale in proposing to impeach the cabinet minister, alleging that the MDP sought to intimidate the government.

“The real motive of the MDP in filing the no confidence motion is to intimidate the government and to waste the time of parliament,” he said.

Mausoom stated that despite his remarks, the party had not yet decided on the matter. However, he claimed that the “general conscience” of the members of his party was “not in favour of impeaching Nazim”.

“Desperate attempt to weaken the government” – Defence Minister Nazim

The opposition MDP filed a no-confidence motion against the Defence Minister last Thursday, alleging he had misused his authority as the Acting Transport Minister by using the military to influence termination of civil contracts involving the government outside of due legal procedure.

The motion followed the government’s decision to void the agreement between itself and Indian infrastructure giant GMR over developing Ibrahim Nasir International Airport (INIA).

Defence Minister Nazim, who temporarily took over the transport ministry following the sacking of former Transport Minister Dr Ahmed Shamheed, played a pivotal role in the eviction of GMR agreement.

In a brief interview given to local media following the MDP’s decision to push a no-confidence motion against him, Nazim stated that move was a “desperate” attempt to weaken the government of President Mohamed Waheed Hassan.

“I believe such votes are taken to weaken this government. I do not believe such votes or motions could weaken this government. I believe the current government is very firm and united. There is a very strong between the partners of the government coalition; therefore I must say they won’t be able to succeed in such votes. This government is functioning far better than that,” he told local media outlet Sun Online.

Nazim also contended he had not done anything for which the opposition should impeach him, adding that his appointment to cabinet was unanimously decided by parties in the coalition government.

The defence minister also expressed confidence that the parliament members from government-aligned parties would defend him in a vote.

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India says Maldives must rein in quarters harming bilateral ties: Times of India

“Amid a diplomatic row over cancellation of the GMR contract, India on Friday asked Maldives to control any quarters which may be trying to harm bilateral relations saying the issue should not put a ‘question mark’ on the ties between the two sides, “ according to the Times of India newspaper.

“If they have to take a decision in interest of their society and country and if that decision is taken properly as per laws there, what objections can anyone have there. We would want that whatever is the decision, it should not put any question marks on our friendly relations,” external affairs minister Salman Khurshid said.  The minister was asked to comment on the developments in the GMR issue outside Parliament house complex.

“If any quarters there (in Maldives) want that our relations should be harmed, then they should be controlled. I think Maldives and its people know this thing properly and I am sure that they will do the same thing,” Khurshid said.

Asked if the Indian Government would ‘intervene’ in the issue, the minister said: ‘For commercial enterprises no one intervenes, but we have been assured about the security and safety of our citizens and interests there.

To that extent, it is our right and we have also told them about this right.’ ‘On the commercial discussions, we don’t have the right and there is no justification for it. Try to understand the issue in right context and I think there is nothing to worry about,’ he said.”

Read more.

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Government revenue 29 percent higher in November

Government revenue in November was 29 percent higher than the same period last year, the Maldives Inland Revenue Authority (MIRA) has revealed.

MIRA collected a total MVR 403.5 million (US$26 million), including US$17.1 million in US dollar receipts during November.

The revenue collected in November was 2.3 percent higher than forecast. Goods and Services Tax (GST) accounted for the largest portion of revenue with 54.6 percent while tourism taxes accounted for 18.4 percent.

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Commonwealth committed to institutional reform, “credible elections” in the Maldives

The Commonwealth has said it will be working with the Maldivian government to push ahead with strengthening and reforming “key public institutions” as it reiterates calls for “inclusive and credible” presidential elections to be held next year.

In a statement issued Friday (December 7), Commonwealth Secretary General Kamalesh Sharma said the intergovernmental organisation would continue to work with international partners and Maldivian authorities on a programme of reform and “practical collaboration”.

Over the last twelve months, the Commonwealth has played a key role in terms of the international community’s stance towards the Maldives, particularly following the controversial transfer of power in February in which the present government came to office.

Following allegations by the now opposition Maldivian Democratic Party (MDP) that President Dr Mohamed Waheed Hassan came to power in a “coup d’etat”, the Commonwealth Ministerial Action Group (CMAG) applied pressure for a reformed Committee of National Inquiry (CNI) to investigate the details behind the change of government.

The CNI’s findings, welcomed by the Commonwealth, US and the UN, rejected accusations that the present government came to power illegally, despite claims from former president Mohamed Nasheed that the report’s conclusions were flawed and failed to include key witness statements and evidence.

The opposition MDP has previously said it holds severe structural concerns about the CNI’s conclusions, but accepted the report had provided a “way forward” to push for institutional reform in areas such as defence and the judiciary.

Teleconference

Following a teleconference held Thursday (December 6) with Maldives Foreign Minister Dr Abdul Samad Abdullah, Commonwealth Secretary General Sharma issued a statement welcoming government assurances that the CNI’s recommendations would be “advanced meaningfully”.

“It continues to be important that there is even-handed implementation of all the recommendations in the Report of the Commission of National Inquiry, including investigations into allegations of police brutality and acts of intimidation,” stated Sharma.

The secretary general also used the statement to emphasize hopes that presidential elections – anticipated to be held during 2013 – would be conducted on a “a level-playing field for all political parties and actors”.

The Commonwealth said it appreciated commitments made by Foreign Minister Dr Samad to this end.

President’s Office Media Secretary Masood Imad was not responding to calls from Minivan News at the time of press over detailing the types of reform the government was said to have committed to following Thursday’s teleconference.

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Government takes over airport, evicts GMR

Indian infrastructure giant GMR has handed Ibrahim Nasir International Airport (INIA) over to the state-owned Maldives Airports Company Limited (MACL), after the Maldivian government voided the concession agreement and gave it seven days to leave the country.

The sudden eviction of the developer – which won a 25 year concession under the former government to manage and upgrade the airport – scraps the project, which at US$511 million was the single largest foreign investment in the Maldives.

GMR had clung to the terms of its concession agreement while the government fanned growing nationalistic and anti-India sentiment. On November 27, President Mohamed Waheed’s cabinet declared the agreement ‘void ab initio’ – invalid from the outset – and ordered the developer to leave.

With arbitration proceedings already underway in Singapore over the contested airport development charge (ADC), GMR received a stay order on its eviction and appeared confident of its legal position even as the government declared that it would disregard the ruling and proceed with the eviction as planned.

On December 6, a day prior to its eviction, the government successfully appealed the injunction in the Supreme Court of Singapore. Chief Justice Sundaresh Menon declared that “the Maldives government has the power to do what it wants, including expropriating the airport.”

That verdict, effectively legalising the sovereign eviction of foreign investors regardless of contractual termination clauses or pending arbitration proceedings, was “completely unexpected”, according to one GMR insider – “the lawyers are still in shock”.

A last ditch request for a review of the decision was rejected, as was a second attempt at an injunction filed by Axis Bank, GMR’s lender to the value of US$350 million.

Following a meeting with staff yesterday, GMR issued the following statement:

“In deference to the orders of the Court of Appeals, Singapore; GMR Male International Airport Ltd (GMIAL) will facilitate a smooth takeover of the Ibrahim Nasir International Airport (INIA) by the Maldives Airport Company Ltd (MACL), effective midnight tonight.

GMIAL has been assured that as a result of this takeover all its employees, suppliers and other interested parties will not be put to any inconvenience. GMIAL remains committed to finding a suitable solution to this situation. We are taking requisite steps to work out the compensation receivable from the Government of Maldives, keeping in mind the judgement of the aforementioned court and the concession agreement dated 28th June 2010.

All actions as above are without prejudice to our legal rights and statements made before various courts/tribunals where matters are currently being pursued or likely to be taken up.”

An invitation-only press conference to mark the handover was held by Defence and Acting Transport Minister Mohamed Nazim in the airport VIP lounge at midnight. Minivan News understands that GMR did not participate for legal reasons.

During the ceremony, Finance Minister Abdulla Jihad presented the official handover documents to MACL Managing Director Mohamed Ibrahim, and said that the Maldives would pay whatever compensation was required “however difficult”.

Economic Minister Ahmed Mohamed claimed the eviction would enhance investor confidence:

“Investor confidence will only increase when they know that Maldives will do everything in accordance with the law,” Haveeru reported the minister as saying.

Attorney General Azima Shukoor expressed hope that the compensation would be lower than anticipated.

Estimates as to the amount of compensation for which the government is liable have ranged from the US$220-240 million GMR estimated it has already invested, up to US$700 million – a sizeable chunk of the country’s GDP.

Apart from the size of the compensation is the Maldives’ ability to ultimately pay, given the crippled state of its domestic economy.

Finance Minister Jihad in late October warned that the Maldives would be unable to pay government salaries without a promised US$25 million loan from India.

A month later, amid rising anti-India sentiment over the GMR issue and a diplomatic incident triggered by the government’s spokesperson, Jihad described India’s calling in of US$100 million in existing loans as “not a major concern”. The debts, he said, would be paid from the state’s reserves, which local media at the time reported could fall to as low as US$140 million (MVR2.2 billion) once the payments to India were settled.

An International Monetary Fund (IMF) delegation in November warned that the Maldives’ financial reserves “have been declining slowly, [and] now account for just one and a half months of imports, and could be more substantially pressured if major borrowings maturing in the next few months are not rolled over.”

Further pressure on reserves came from a ballooning public debt ratio, “which now stands at over 80 percent of GDP, and has helped to boost national imports, thus worsening dollar shortages in the economy and putting pressure on reserves,” the IMF warned.

Presenting the 2013 budget to parliament in late November, Jihad warned of “bitter consequences” should the spending trend continue.

His target budget deficit of 6.1 percent in 2013 takes into account a raft proposed revenue raising and cost cutting measures which would impact the tourism industry – such a proposed tourism GST increase to 15 percent – and require parliamentary approval.

Further modernisation of the airport – or even completion of the existing upgrade – is likely to require extensive outside assistance or further loans. The rusting foundations of GMR’s new terminal sits on 60 hectares of newly reclaimed land on the airport island, after the government ordered a halt to the development in August. Large sections of the old terminal remain boarded up for construction work, which the government’s ability to proceed with is in doubt.

Further modernisation of the airport is likely to depend on outside assistance. President’s Office Spokesperson Masood Imad told Indian newspaper The Hindu yesterday that after reclaiming the airport, the government would again float a tender for its modernisation “and get more parties in to take the work forward.”

“The tender will be floated by the Maldives government in a transparent manner and after consulting investors. The mistakes made during the float of the tender which has been cancelled will not be repeated,” Imad told the paper.

Environment Minister Dr Mariyam Shakeela has meanwhile separately appealed to China for financial and technical support, telling journalists from the Chinese government’s authorised web portal China.org.cn that the Maldives “needs funds for infrastructure building.”

“We are obviously in need of funds and technical assistance as we do not have the financial means, the technical know-how or the capacity to address these huge climate change issues,” said Mariyam, in an appeal for assistance with climate adaptation.

The government has dismissed speculation Chinese involvement in the development, however Minivan News has learned that senior Chinese military officials landed at the airport in the tense week leading up to the handover, even as India warned of “adverse consequences” should the government proceed with forceful eviction.

India’s reaction after the Singapore Supreme court ruling was muted. Ministry of External Affairs Spokesperson Syed Akbaruddin said the ministry was “studying” the judgement and that their lawyers “need to understand it”.

“There are two issues in the case – one the sovereign right of a nation and other the legality of the agreement, which was linked to compensation to GMR and its associates in Malaysia, he said the latter part has not been “affected or responded” in today’s judgement.

“These issues are not affected with the judgement or not responded to. Fulfilment of all legal process and requirement is what we want to see in this case and we hope that all relevant contracts and agreements would be adhered to and all legal process are carried through,” he said.

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Divers continue search for Chinese tourist missing from Maldives resort

Coastguard divers are trying to locate a Chinese tourist reported missing from the Bandos Island Resort and Spa property since Thursday (December 6).

Maldives National Defence Force (MNDF) Spokesperson Colonel Abdul Raheem said that a diving team was conducting further searches of the area surrounding the resort to try and locate the tourist, identified as a female Chinese national who had been staying at the resort.

When contacted by Minivan News today, a spokesperson for Bandos Island Resort and Spa said it would not be making any comments on the matter at present, asking to be contacted in 24 hours time.

“It is not possible for us to comment today, our manager is not on duty,” said a representative for the property’s marketing department said.

Police Spokesperson Sub-Inspector Hassan Haneef was not responding to calls from Minivan News at the time of press.

Boat collision

Details of the search operation were announced after a male tourist from Finland was killed last Sunday (December 2) when an express speedboat service to the island of Hulhumale’ collided with another vessel belonging to the Bandos Island Resort and Spa.  Nine local people were also injured in the collision.

The Honorary Consul of Finland in the Maldives confirmed this week that it was assisting the resort property in working to arrange repatriation of the tourist, while investigations by police and transport authorities continue into the matter.

Following the collision on Sunday, a spokesperson for the Maldives Transport and Contracting Company (MTCC) said it had temporarily suspended its express speedboat service between Hulhumale’ and Male’ while it reviewed guest safety procedures.

“We believe we need to do some work on safety,” a company spokesperson told Minivan News. “We will be working with transport authorities, the Maldives National Defence Force (MNDF) and the police on the matter and will resume the services after that.” Dhoni services will continue to run between Male’ and Hulhumale’ as normal, the MTCC added yesterday.

Danger awareness

Over the last 12 months, tourist deaths – usually while snorkelling – have been disproportionately higher among Chinese tourists, which now account for a majority of Maldives tourist arrivals even compared to traditional European markets.

Mohamed Ibrahim ‘Sim’ from the Maldives Association of Tourism Industry (MATI) previously told Minivan News that Chinese guests in particular needed to be made more aware of the dangers of snorkelling in the Maldives, “because it is a totally different environment than what they are used to.”

Back in October, police said that a 26 year-old male from China staying at Alif Dhaal Atoll Vakafaru resort was suspected to have died in a snorkelling accident at the property.

Meanwhile in January, two Chinese nationals on vacation at separate island resorts in the Maldives were found dead within 48 hours of each other.  Authorities said they suspected both incidents were the result of snorkelling accidents.

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